I know, I'm going to get a lot of it depends answers, but if that is your answer please give me for example....my deal similar to yours was x points, x% etc etc.
I've been networking and have some potential deals where I would be a lender for an investor. For round #'s sake, assume this example:
Purchase Price $100,000
Repairs Required $7,000-10,000
What type of points/rate combinations would you say is competitive, meaning a good deal for the borrower when the lender isn't a best friend. Estimated loan length 6-12 months until rehab and refi (they want to rent it out not sell it)
Hey Chris, rather than giving you points and fees for this potential catastrophe, I would recommend you see if he can borrow from an institutional niche lender, like Lima One, Visio Lending, or Peak Asset rather than risking your money on a high LTV like that. What if the work doesn't get completed as planned or if the costs are twice as high. This is a big risk for a friend and it WILL change your relationship. How many times has he done this before? I'm a lender myself, so I'm speaking from experience (I'm thinking of a two-year long process on a rehab in Colorado). There are lenders that specialize in ARV build to flip deals and I'd hate to see you lose a friendship over the many potential problems.